I do not mean much economy but I think that profit is a matter more cultural than economic. The profit is "the difference between the value of the product sold and its cost of production." Production costs are all costs necessary to make the product sold. These costs are the raw materials, office rent, utilities, machinery, maintenance, salaries, wages and there is also that of the entrepreneur.
We have to be in any one location to observe the entrepreneur Rossi.
Mr. Rossi has created a small production of handmade biscuits. He started to produce a quantity of product sufficient to meet only half of the requests. He later changed its production to find the average amount for you. The salary of Mr. Rossi is commensurate with responsibilities covering the farm and the time devoted to this one. The salary of the 5 dependent and related to the work that each of these plays in production and administration.
this company's profit is zero. This means that all receive their regular salary, including red, and that all external costs are paid.
If the profit is negative there would be a problem within the company. It would be necessary to lower the cost to equalize the situation and return to a profit of zero. Rossi would lower the costs down a bit to all the salary and in this case would be to lose all workers, including red. Consider the possibility
to lower wages as if it were a business asset. The company pays 100 per month for salaries. If the company had an exceptional need 20 instead of 100 could pay 80 to 20 recovering so he needs. In this sense, beyond any ethical issue, the possibility of lower wages to recover money that can be seen as a corporate asset. This resource, however, is not infinite and will reach its limit when all the workers inside and outside will begin to work for free. But this limit is reached, the company would collapse because the workers, who are in need of salary, should be off and the company would stop. If the profit was instead
positive there would be the exact same problem, but outside the company with the same dynamics as described in the opposite case, as well as resources outside the company are not infinite. Resources outside the company are only more numerous, very numerous, and for this reason we tend to see much. When the profit is positive
something external is consumed, there is nothing to be done. So how do you lower salaries (internal resource) to deal with a negative profit, so it changes a number of external resources to cope with a positive profit.
is why I believe that the pioneering entrepreneur will be successful when able to consistently maintain the profitability of his business to zero.
